Minimum insurance coverage for 4 policy types

Home insurance: Risky to ditch it

While you're not required to buy home insurance when you own your home outright, if you're financing your home your lender will insist that you keep at least a minimum insurance policy in force for the term of your mortgage.

Worters says when housing prices plummeted, some owners made the mistake of dialing back their coverage to their home's reduced market value.

"It's not about the value of the house -- it's about the cost to rebuild," she says. "Construction, plumbing and electrical costs have all gone up."

The hidden danger of going bare on home insurance is liability. "If somebody trips and falls on your property or you have a pool, that's really risky," Worters says.

What about stashing those premium bucks into a contingency fund and self-insuring?

"If you have the discipline, that's great, but most people cannot do it," Worters says.

Best options: Don't go bare, but maximize the discounts. You can save 5 percent to 15 percent by bundling your home and auto policies with one company, 15 percent to 20 percent for a combination fire/burglar/sprinkler security system, and up to 25 percent by raising your deductible, according to the Insurance Information Institute. Plan B: Consider renting.

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